Mumbai: The planned merger between Sony Group Corp’s India unit and Zee Entertainment Enterprises Ltd. will create a media giant worth around $10 billion, unless affected by the ongoing court tussle between Zee’s founders and its largest shareholder.
“The relative value of the combined entity is potentially close to $10 billion. The revenue will certainly reach around $2 billion,” Zee Managing Director and Chief Executive Officer Puneet Goenka said in an interview on Wednesday. He expects all necessary approvals to come in eight to 10 months to help complete the deal in the second half of 2022.
The proposed transaction, which will be done by Sony Pictures Networks India Pvt. The merged entity and Zee’s founders hold 50.86% stake in 3.99% while public shareholders hold the remainder, creating a media firm with the largest audience and pricing power in the country of around 1.4 billion people.
“In the broadcast sector, they will be number one and this will give them tremendous pricing power, especially on the advertising revenue front,” said Vivek Menon, co-founder of Mumbai-based NV Capital. The over $1 billion infusion will also help Sony-G join the challenge streaming giant Netflix Inc and Amazon.com Inc’s Prime Video, he added.
Atlanta-based Invesco Developing Markets Fund – at 18%, it holds the largest stake in Zee – was unhappy with the way the media firm is run and held frequent shareholder meetings in recent months to remove Goenka from the board and as CEO. demanded.
The fund did not respond to an email from Bloomberg seeking comment on the announcement of Wednesday’s deal with Sony. The matter is being heard in the Bombay High Court in January.
Goenka said Zee is ready to enter into an amicable settlement with Invesco. “I’m happy to try and discuss a solution that will work for both of us,” he said. “I have to offer a deal that is in the best interest of all shareholders. And their wisdom will prevail.”—bloomberg
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